Australian Property

Viewing posts in the Australian Property category

How the CGT discount fueled property speculation

ScreenHunter_12 Sep. 23 12.54 By Leith van Onselen The Australian Treasury has released a new paper, which examines historical trends in capital gains taxes (CGT), as well as forecasting issues. While the paper is rather wonkish, and not particularly interesting, it does point-out that the decision by the Howard Government in 1999 to halve the rate of capital gains tax for investments held for more than year has fueled negatively geared property investment: ...the total effective concessions on capital gains income are significant. Both the indexation and discount methods have provided a strong incentive towards...
read more

What Grattan’s city-centric report really showed

ScreenHunter_3524 Jul. 29 16.37 By Catherine Cashmore, a market analyst, journalist, and policy thinker, with extensive industry experience in all aspects relating to property. Follow Catherine on Twitter or via her Blog. “Too many workers live too far away to fulfil our cities’ economic potential” - is the conclusion of a recently published study by the Grattan institute. The report maps the dollar value of goods and services produced by workers within a particular area of Australia’s biggest cities. Demonstrating a disproportionate 80% is created on just 0.2% of the nation’s land mass. It mirrors findings...
read more

MPs to quiz Chinese on Aussie property purchases

ScreenHunter_06 May. 06 09.27 By Leith van Onselen From The Australian comes news that members of the Parliamentary into into foreign property investment will embark on a week long tour of China to help ascertain the degree of investment in Australian property: The delegation is being led by committee chair, Kelly O’Dwyer, who is joined by fellow Liberals Peter Hendy and Scott Buchholz and Labor’s Pat Conroy... This is not the reason for the trip but the MPs will have the chance to get China’s perspective about the sensitive foreign investment issues... And on the question of Chinese investment in housing,...
read more

S&P warns on increasing mortgage risks

ScreenHunter_30 Oct. 10 06.15 By Leith van Onselen Standard & Poors (S&P) has released a new report warning of increasing risks for the Australian housing market due to rising investor participation, slowing income growth and softening employment prospects, which could create mortgage repayment pressures for recent, highly leveraged, purchasers: All else being equal, falling interest rates have brought improvements to lending serviceability and, after a brief period of balance-sheet restoration, renewed lending demand, with Australian households--and investors especially--at the forefront. These easing conditions,...
read more

No Nick, FHBs should not be allowed to use super (members)

ScreenHunter_3508 Jul. 29 09.47 By Leith van Onselen Independent senator, Nick Xenophon, has announced that he will introduce legislative changes in the Spring session of parliament to allow first home buyers (FHBs) to access their superannuation savings to pay a house deposit: Such a scheme successfully operates in Canada, called Home Buyers’ Plan, leading to improved housing affordability... In Canada up to $25,000 can be accessed for a first home, and it’s made a dramatic difference for housing affordability there. However, Senator Xenophon will be moving for changes to Superannuation Act 1976 to allow the...
read more

Platinum founder warns on property “act of faith”

ScreenHunter_3505 Jul. 29 08.50 By Leith van Onselen The founder of Platinum Asset Management, billionaire investor Kerr Neilson, has released an interesting report warning about Australia's frothy house price valuations and the risks of a correction once "conditions change, [and] a lot of the assumptions are found wanting". The report highlights four "facts" about Australian housing: 1. Returns from housing investment are often exaggerated and flattered by inflation. 2. Holding costs of rates, local taxes and repairs are estimated to absorb about half of current rental yields. 3. Long-term values are determined by...
read more

Residex: House prices cooling (members)

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen Residex has released its home price results for June, which revealed an acceleration of growth at the national level, with national house values rising by 0.92% over the month and unit values rising by 1.66% (see below tables). In the 2013-14 financial year, dwelling values rose by 7.09% (houses) and 7.70% (units) at the national level, led by Sydney (15.37% houses; 13.30% units) and Melbourne (8.32% houses; 6.04% units). According to Residex founder, John Edwards, despite the solid increase in values in June, the Australian housing market is cooling (see Chart...
read more

Has China shut the money laundering pipe?

HSBC money laundering Apparently HSBC has shut off its Chinese yuan exchange service: I can't find any external corroboration of this, nor any new news about the money laundering scandal in China so any shift in the environment around Chinese money flowing into Australian real estate is best treated as apocryphal at this...
read more

Auction clearances record broad-based falls

ScreenHunter_19 Mar. 13 13.12 By Leith van Onselen The national auction clearance rate declined over the weekend, with Sydney, Melbourne and Brisbane all recording falls. According to RP Data, the national weighted average preliminary auction clearance rate was 67.3% over the weekend, which was down 3.4% from the 70.7% preliminary clearance rate reported last weekend. Sydney’s clearance rate fell by 1.0% to 75.9%, whereas Melbourne’s fell to 66.1% (last weekend 69.6%). Brisbane, which typically only has a small number of auctions, experienced a sharp fall in its clearance rate to 44.2% from 54.1% the weekend before....
read more

RP Data weekend property market update (members)

ScreenHunter_18 Mar. 18 17.58 Click to view RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 27 July 2014. This week’s report includes: Latest weekly dwelling value results; Auction results & clearance rates; Latest median house & unit prices; Average time on market & vendor discounts; Mortgage market activity; and New listings...
read more

Real Aussie house prices 2.5% below peak

ScreenHunter_15 Mar. 05 15.42 By Leith van Onselen RP Data’s Cameron Kusher has produced an interesting post on Australian housing values in the wake of Wednesday's June quarter CPI release from the ABS: At a headline level, combined capital city home values have increased by 10.1% over the 2013/14 financial year. The latest CPI data showed that inflation was recorded at 0.5% over the second quarter and at an annual rate of 3.0% throughout the 2013/14 financial year. ...home values generally remain well below their previous peak (in real terms) across the capitals. In non-inflation adjusted terms home values are...
read more

Victoria to legislate against shoebox apartments?

ScreenHunter_3480 Jul. 25 10.20 By Leith van Onselen It looks as if Melbourne will soon implement new rules that will mandate minimum sizes on new apartments, as well other design rules, in order to prevent high rise from becoming "future slums". From The Age: Among the mandated rules for developers proposed under the Office of the Victorian Government Architect’s draft Better Apartment Design guidelines would be minimum ceiling heights of 2.7 metres... The draft guidelines... would also see minimum apartment sizes set at 37 square metres for a studio apartment. A one-bed unit would be a minimum of 50 square metres; two...
read more

The CIS is wrong on macroprudential

ScreenHunter_282 Nov. 14 14.15 By Leith van Onselen Stephen Kirchner from the Centre for Independent Studies (CIS) has posted a convoluted article in Business Spectator lobbying against macro-prudential controls on higher risk mortgage lending: ...monetary policy is a blunt instrument, making it unsuitable for addressing what are seen to be excesses in credit growth tied to specific asset classes. Central banks have a poor track record when it comes to taking an activist approach to changes in asset prices... When it comes to asset price booms and busts, central bankers can be divided into asset price ‘poppers’ and...
read more

Weekly RP Data Australian house price update (members)

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen In the week ended 24 July 2014, the RP Data-Rismark 5-city daily dwelling price index, which covers the five major capital city markets, rose by 0.02%. It was the sixth consecutive week of rises (see next chart). Growth in Sydney, Melbourne and Adelaide were almost fully offset by falls in Brisbane and Perth (see next chart). Values are now up 1.65% in July, driven by massive gains in Melbourne and strong gains in Sydney (see next chart). Values are up by 5.07% so far in 2014, with all major capitals except for Perth experiencing growth, and particularly...
read more

Moodys: Negative gearing adds 9% to prices

ScreenHunter_12 Sep. 23 12.54 By Leith van Onselen From The AFR comes some interesting analysis from Moody's estimating that allowing property investors to deduct rental property losses against unrelated wage and salary income - known as "negative gearing" in Australia - has added some 9% or $44,000 to the typical Australian home value: The report said that negative gearing costs the federal government around $4 billion in lost revenue and recognised by some economists as an “unfair and unproductive” distortion... With low interest rates the impact of the subsidy has fallen from a 2008 peak of 15 per cent, “yet...
read more

Australia’s tumbling neutral cash rate

cs-620x349 Via the SMH blog: ...from Credit Suisse's Damien Boey and Hasan Tevfik: "It would only take 100bps" - [1 percentage point] - "of rate hikes to bring the debt-servicing ratio back to GFC highs, which we view as unsustainable." That's their take on the Reserve Bank of Australia and the interest rate outlook and part of the reason why they think if the RBA did raise, the peak would be below 3.5 per cent. Right now rates are at 2.5 per cent. Borrowers can't afford rate rises like they used to because mortgages are bigger in dollar terms. Yep, the stupidity of it all. This is why I argue...
read more

APM: House prices still booming (members)

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen Australian Property Monitors (APM) has released its June quarter house and unit price results (below), which recorded a 1.9% increase in house prices over the quarter at the national capital city level, and a 2.5% rise in national capital city unit prices. In the year to June 2014, APM recorded an 10.9% increase in national capital city house prices and an 8.3% rise in unit values - a slight deceleration from the 11.3% (houses) and 8.3% (units) annual growth recorded in the March quarter release. Looking at the capital city breakdown, you can see that Sydney...
read more

Why rental growth just keeps on falling

ScreenHunter_19 Mar. 06 16.12 By Leith van Onselen The June quarter consumer price index (CPI) data, released today by the Australian Bureau of Statistics (ABS), revealed a continued moderation of rental growth at the national capital city level. According to the ABS, rents nationally grew by 0.6% over the June quarter of 2014 – down slightly on the 0.7% growth recorded in March – but moderated to 2.4% growth in the year to June – the lowest annual growth recorded since December 2005 (see below charts). The outlook for rental growth is weakening. While population growth is still running strong - which...
read more

Are banks slashing mortgage rates out of cycle?

adfa From the AFR: The Commonwealth Bank has slashed its five-year fixed mortgage rate to a record low of 4.99 per cent, offering borrowers the chance to exploit historically low interest rates. The country’s biggest lender said on Wednesday its five-year rate would fall 0.7 percentage points to 4.99 per cent, the lowest rate in the market. It is the first time the bank has cut its five-year fixed rate below 5 per cent. ...Fixed rates are influenced by the outlook for the cash rate...ANZ Bank interest rate strategist Zoe HcHugh said markets were pricing in a 50 per cent chance of a quarter-point...
read more

SMSF leveraged property in the spot light

ScreenHunter_12 Sep. 23 12.54 By Leith van Onselen The draft report of the Murray Inquiry into Australia's financial system, released last week, took direct aim at self-managed super funds (SMSFs) and leverage, warning that they could pose risks to the financial system and retirement savings: The use of leverage in superannuation funds to finance asset purchases is embryonic but growing. The proportion of SMSFs with borrowings increased from 1.1 per cent in 2008 to 3.7 per cent in 2012. The average amount borrowed increased over this period from $122,000 to $357,000. Total borrowings in 2012 were over $6.2 billion. More...
read more

Joye: Australian housing bubble is now

ScreenHunter_3365 Jul. 20 08.17 By Leith van Onselen The AFR's Chris Joye posted a great article over the weekend explaining why he believes that Australian housing is now a bubble since values are between 20% and 30% above fair value: Australian homes are 19 per cent overvalued... if you compare the house price-to-income ratio to its average since 1993. Other credible benchmarks on which to base future house price appreciation – including household income growth, the returns consumers think they will get and the rate at which rents rise – similarly imply that housing is overvalued by between 20 per cent and...
read more

RP Data weekend property market update (members)

ScreenHunter_18 Mar. 18 17.58 Click to view RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 20 July 2014. This week’s report includes: Latest weekly dwelling value results; Auction results & clearance rates; Latest median house & unit prices; Average time on market & vendor discounts; Mortgage market activity; and New listings...
read more

Auction clearances record broad-based rise

ScreenHunter_19 Mar. 13 13.12 By Leith van Onselen The national auction clearance rate rose over the weekend, with Sydney, Melbourne and Brisbane all recording increases. According to RP Data, the national weighted average preliminary auction clearance rate was 70.7% over the weekend, which was up 2.0% from the 68.7% preliminary clearance rate reported last weekend. Sydney’s clearance rate rose by 0.5% to 76.9%, whereas Melbourne’s rose to 69.6% (last weekend 67.0%). Brisbane, which typically only has a small number of auctions, experienced a sharp rise in its clearance rate to 54.1% from 47.0% the weekend before....
read more

Housing loan-to-income by state

LTIAllStates Cross-posted from Martin North's DFA blog: Some time back we reported on the results of our household surveys, looking especially at the loan to income (LTI) data. This was prompted by the Bank of England’s move to limit banks abilities there to lend higher LTI loans. At the time we showed that at an aggregate level, LTI’s in Australia were higher than in the UK, yet despite this, there was no evidence of any local move to curb higher LTI borrowings, other than vague warnings from the regulators more recently. There is little relevant data published by the regulators on this important...
read more

Weekly RP Data Australian house price update (members)

ScreenHunter_15 Mar. 05 15.42 By Leith van Onselen In the week ended 17 July 2014, the RP Data-Rismark 5-city daily dwelling price index, which covers the five major capital city markets, rose by 0.39%. It was the fifth consecutive week of rises (see next chart). The growth nationally was driven by a strong rise in Melbourne (see next chart). Values are now up 1.62% in July, driven by massive gains in Melbourne and strong gains in Sydney (see next chart). Values are up by 5.05% so far in 2014, with all major capitals except for Perth experiencing growth, and particularly strong gains recorded in Sydney...
read more
Page 1 of 7912345...102030...Last »